Startups: Know When To Exit | William Nozak | Harper’s Hut Shaved Ice

Startups: Know When To Exit | William Nozak | Harper’s Hut Shaved Ice

How do you know when to enter a specific field, venture, or partnership? I think it is that personal knowing, that you can make whatever it is that you are undertaking, work. Jumping from ledge to ledge is scary, energizing, full of unknowns, fulfilling, and dangerous. What a mixture of emotions an entrepreneur navigates to get from point A to point B. The internal management of this “sauce” propels an entrepreneur like a sling shot. The pay off is fulfillment and of course greater earning potential. It has risks. You might land back at square one, in bankruptcy court, or even worse. Once you have taken the plunge and given business both hemispheres of your brain it does not get easier. Markets change, products are duplicated, customer-needs change, smarter competition enter the sector, assumptions become invalid, and pain points evolve. Not only do you need courage to start, succeed, and then thrive, you also must have courage to exit.

You made the jump, maybe not your first try, who cares, none of us do. Some do. You created a beautiful business, a great product or service. Outstanding. Or maybe you got lucky and built a mediocre business, product, or service. Either way, you connected the dots, found a product-market-fit and succeeded; profited. But it was not your love or you got bored, so you took those skills that helped you elevate an unknown business to profitability and you built other businesses. Say you bought a franchise and created another service company. You transcended from business owner to investor. This can work, does work, should work. If you have replaced yourself with leaders. If you have not, how will you track the market, innovate, iterate, improve, and exit when the time comes? You will not.

If your first business was a stepping-stone to businesses with greater volume or profit margins, great. You could be a serial entrepreneur, very different from a typical entrepreneur following the Hedgehog Concept. Regardless, businesspersons in your sector watch and learn from your wins and losses. Not only are you paying for your own education, likely, you are paying for the competitions as well. Without a true leader or innovator involved in the venture your market share is unprotected from wolves, vultures, and companies that are passionate about the segment. Capitalist markets turn this way. They churn. Sears was once the largest retailer in America. I have not shopped at sears since the 80s. A great philosopher once said rarely are things created from whole cloth. Certainly, your competition is one or two steps behind you. If you no longer are engaged in your business or have minds that are, exercise your genius and know when to exit.

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The Innovative Entrepreneur (Series) | The Fight To Startup | Harper’s Hut Shaved Ice

The Innovative Entrepreneur (Series) | The Fight To Startup
William Nozak | Harper’s Hut Shaved Ice
Two thousand thirteen I bought a franchise 1700 miles away. Why? Who knows? I could never have predicted the journey ahead. How can I own and operate a business 1700 miles away? I mean if I had an operations manager on the ground, sure, no big deal this is common practice. People own business investments the world over. The world truly is flat. But no, I am the operations manager 1700 miles away, with a lead technician on the ground. How this works I bet you would like to know.

September 2013 I fly into Denver and purchase three Carpet Cleaning territories of a well-known franchise. The territories are 1700 miles away from me. I live in Tulsa; the territories are in San Francisco. Long story short, I purchased a franchise with a dashboard that makes such an endeavor possible. Why going with a franchise was the right thing to do? This franchise came with a built in call center, software that pushes jobs out to individual technicians, product-order tabs, marketing & process material print offs, and technician training. These processes are vital to run my telephone-based business. Just to clarify I own a Shaved Ice Company (Harper’s Hut Shaved Ice) and it is not a franchise; I own and operate all locations plus all are within driving distance. In comparison, a completely different animal.

Franchise Provided Processes

Call Center
You need some form of trained rep that knows the services and products as well or better than you do. For me it is easy, I have telephone numbers in my territories that forward directly to the call center. As I mentioned the call center came with the franchise, which included trained reps booking jobs 7 days a week. A little more legwork is required if starting from scratch. They book for hundreds of franchisees, so they are skilled. These reps know the products, services, and the brand as well as anyone. These call center reps book jobs into a spreadsheet that each technician has access.

The franchise website allows for quotes and 24-hour booking. So the booking software, the expensive website are two necessities to be a remote manager in this situation. Had I built the website from scratch with the platform to schedule jobs, the cash outlay would never have made sense.

Additional Resources
The franchise also has the following tabs that allow easy access to a plethora of business needs. The tabs include Net Promoter Score to monitor customer perception, Email Marketing in order to push out monthly and quarterly emails, Product Ordering, Hiring, Training, software to track marketing costs and ROI’s per marketing piece, and several other necessary tabs. The cost to produce a setup of this magnitude would makes this operation impractical at start up. These are the pros; of course, there are cons, for one this is not cheap! We can go into that another day.

Entrepreneur Innovative Processes

UPS Stores
I flew into San Francisco, rented a car and drove 50 miles north to secure my UPS stores. I have three territories North San Francisco, San Rafael, and Santa Rosa. I secured UPS boxes in my northern territory, where my employees live, in order for easy mailing of the work orders, which accompany each completed job. UPS then forwards these work orders to my business address in Oklahoma. Employees drop to-be-forwarded work orders weekly and deposit checks into my Chase account every other day.

Virtual Office
Since the business is not a brick and mortar, in order to rank with Google, I have virtual offices. A virtual office is an establishment where you can rent a fully furnished office space. Benefits include the ability to rent the office space for a day/week or just hold an hour-long meeting. These virtual offices are unbelievably equipped with state of the art equipment. Sine I am a service company with no brick and mortar I rent a box in their mail room. I pay a monthly fee and am able to use their address as my address. So I have three virtual offices, which are located centrally in my territories and are used for Google verification, etc. I used these instead of my UPS boxes with suite numbers and P.O. boxes, because Google views the virtual office address as a legitimate business address.

Now I live in Oklahoma and we have lax laws relatively speaking concerning employees. So running a franchise located in California would make my little business a floating log in an ocean of barges. In other words, California is highly regulated. So, I use a PEO (Professional Employer Organization). It works like this. I am in a legal relationship where the duties of the employer are divided between the Employer of Record (PEO) and the Employer of Personnel (me). The Employer of Personnel (me) is responsible for hiring, firing, on-site supervision and all strategic aspects of the business, while the PEO is responsible for payroll and tax administration, workers’ compensation, unemployment, compliance, benefits and benefit administration. Talk about one of the best decisions of my life. One again, not cheap! But Infiniti HR has been worth every penny, so kudos to them!

Hiring & Training
I try to keep things as scalable as possible. So I mentioned the franchise provides a hiring tab. I use it. It connects me to Hireology. I order employment applications to be listed on Craigslist and Indeed for carpet technicians from my home. The more expensive listing options i.e. Career Builder have proved to be a waste of money for my searches. Once Infiniti had given me the rundown of do’s and don’ts, I started interviewing over the phone. The great thing about Hireology is they store the employee’s application, resume, and background checks. It is seamless. Once I had good employees on the line, I was able to run them through an okay training session provided from the home office, which was great concerning understanding the products, but fell very short when it comes to training the technician how to handle the myriad of carpets, upholstery, and tile & grout properly. So I paid my neighboring franchisees to take my new hires under their wings and train them on paperwork, cleaning, and client interactions. It was that simple. Not cheap, but simple. A couple phone calls, 1099 forms, I was in business. Not having neighbors would have made this strategy impossible.

Before I took my initial trip to San Francisco, I researched a secure storage facility. I set up my business with the facility that would receive my packages and store them in a holding room. I signed a liability release waiver and wham I was in business, shipping my products directly to the storage facility. Very few storage units offered this service and the one that did was not cheap, to the tune of $400 a month. Nevertheless, I had a storage facility that I ran my business. My team would meet at the storage unit, gear up, and have weekly team meetings with me through the iPhone video & voice calling application Tango.

Key Performance Indicators

I try to keep my mind wrapped around three very simple performance indicators. Social media, upsales, and NPS. Positive social media reviews must always be increasing. When I have gone a week or two with no social media mentions, employees must be reminded to keep sounding the alarm. Also, although the built in call center does a great job with quoting, there is additional work to be gained in each home. I expect my employees to average over 20% in organic sales. Lastly, I watch my Net Promoter Score (NPS) very closely. It is impossible to make every customer happy, but it is possible to make him or her happy enough to refrain from posting bad reviews, hypothetically. So we have expectations of how low we are willing to allow our NPS to go. I spend my time managing a few other KPI, but these are the three ‘handles’ on my remote business.

File Storage
Being meticulous with document storage is necessary so we use a system of binders, filing cabinets, and everything that can be stored in the web is stored on Dropbox.

Marketing has so many angles; I will cover the simple aspects we used to get our brand out to our territories. Very simply, the franchisor was in the process of setting up a National Ad Fund (NAF), which does help with much of the SEO. Things we did on our end to market our unknown brand was of course through social media (Facebook & LinkedIn profiles) the home office set up the Google+ accounts, which allowed us to set in our Google maps. We set up a YouTube channel to post videos and a WordPress account for local blogging. We pushed both video and text out to as many sites as possible. Referencing cities is vital when it comes to business blogging. The marketing we pay for are Valpak, Money Mailer, and RSVP, and we pay for our Yelp listing, which I do not advise if you do not actively seek out positive reviewers. Social Media Cards that show all the places the client can review your company online is all that you need to get reviewers. We also invest in a lot of POP literature and magnets for each client. We send out monthly emails and quarterly emails to clients that provide a proper email. Local newspapers, AdWords campaigns, Clippers Magazines, Groupon, Living Social, and Amazon are other ways in to increase your client list.

Anything is possible for an innovative entrepreneur. If you can think of it, options most likely exist. Of course, cities that are more populated and technologically advanced will offer more options. These same cities are typically entrenched by competition. Next article in this series will include other innovative techniques for entrepreneurs. For more business related articles by William Nozak visit
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